The Future of ESG for New Governance Professionals
As you embark on your corporate governance career, one area that’s rapidly evolving and becoming central to boardroom discussions is Environmental, Social, and Governance (ESG). With new regulatory and legislative updates rolling out in 2025, ESG is no longer a “nice to have” but a critical part of governance and strategic decision-making.
For those starting out, understanding the challenges that ESG presents—and how real companies have struggled or succeeded—will be essential for your development as a governance professional.
The Challenges Governance Professionals Face with ESG: Deeper Dive & Examples
1. Lack of Standardisation
Challenge:
There is no single, universally accepted standard for ESG reporting. Multiple frameworks exist—such as GRI (Global Reporting Initiative), SASB (Sustainability Accounting Standards Board), TCFD (Task Force on Climate-Related Financial Disclosures), and more. This fragmentation leads to inconsistent disclosures, making it difficult for investors and stakeholders to compare companies or assess real ESG performance.
Example:
Many companies, including multinational corporations, face criticism for reporting ESG data that appears positive but uses different measurement standards. In Ireland, large firms have been called out for inconsistent climate reporting, creating uncertainty for investors seeking reliable ESG data.
What this means for new governance professionals:
You’ll need to understand the key frameworks and push for clarity and consistency in reporting within your organisation.
2. Complexity and Achievability
Challenge:
Effective ESG integration requires knowledge across disciplines—from environmental science to social policy and ethical governance. Smaller or less-resourced companies often find this challenging. Additionally, setting realistic targets and delivering meaningful change requires cross-department collaboration, clear data collection processes, and ongoing monitoring.
Example:
The Irish energy company ESB has been investing heavily to reduce its carbon footprint, yet balancing the pace of transition while maintaining energy security and profitability remains complex. Many organisations struggle similarly with setting achievable targets that align with overall business strategy.
What this means for new governance professionals:
You’ll need to facilitate dialogue across departments, understand operational realities, and help set ESG goals that are ambitious yet feasible.
3. Greenwashing Risks
Challenge:
Greenwashing—making misleading claims about sustainability or ESG credentials—has become a significant issue. It undermines stakeholder trust and can lead to legal and reputational damage.
Example:
Global companies like Volkswagen famously faced backlash over the “Dieselgate” emissions scandal, where software was used to cheat emission tests. More recently, Irish companies have been scrutinised for overstating their green credentials in marketing and sustainability reports.
What this means for new governance professionals:
You must champion transparency and integrity in ESG disclosures, ensuring claims are backed by data and verified processes.
4. Regulatory and Reporting Pressures
Challenge:
New ESG regulations coming into force, including the EU’s Corporate Sustainability Reporting Directive (CSRD) and Sustainable Finance Disclosure Regulation (SFDR), place heavier compliance demands on companies. The complexity and volume of required disclosures are increasing, demanding more sophisticated governance responses.
Example:
Many Irish SMEs and larger firms alike are preparing to meet the CSRD deadlines starting in 2025-2026, needing to upgrade internal controls, reporting systems, and governance structures to comply.
What this means for new governance professionals:
You will play a key role in ensuring your organisation is ready for these changes, coordinating compliance efforts across legal, finance, and sustainability teams.
5. Balancing Short-Term Business Performance with Long-Term ESG Goals
Challenge:
Boards often face pressure from shareholders for short-term financial returns, which can conflict with the long-term investments required for meaningful ESG progress.
Example:
Some Irish companies in sectors like agriculture and manufacturing struggle with this balance. For example, Bord Bia, the Irish Food Board, has highlighted the tensions between sustainable farming practices and immediate profitability pressures faced by producers.
What this means for new governance professionals:
You’ll need to help align ESG goals with business strategy, communicating the value of sustainable practices as drivers of long-term resilience and value creation.
Why This Matters for New Governance Professionals
Starting out in governance means being ready to tackle these ESG challenges head-on. Your role as a steward of accountability and transparency is crucial for:
- Building trust with investors, employees, and wider stakeholders
- Mitigating risks that could threaten your organisation’s reputation and viability
- Driving positive impact on society and the environment alongside business success
How to Build Your ESG Governance Toolkit
- Learn the frameworks: Familiarise yourself with GRI, SASB, TCFD, and upcoming CSRD requirements.
- Develop cross-functional collaboration: ESG success depends on finance, legal, operations, and communications teams working together.
- Champion transparency: Push for honest, clear, and verifiable ESG disclosures.
- Stay updated: ESG is fast-changing—make continuous learning a priority.
Ready to Build Your Expertise?
The MSc in Corporate Governance at Hibernia College offers tailored training to prepare governance professionals for these evolving demands. With dual accreditation and full chartership from the Corporate Governance Institute (UK & Ireland), it’s designed for those shaping the future of governance in Ireland.
Doing good, whilst doing business is no longer optional—it’s essential. Understanding ESG’s challenges and opportunities will position you as a forward-thinking governance professional.
